Growthpoint Properties issues maiden $425m eurobond, lists on JSE green bond segment

JSE-listed real estate investment trust Growthpoint Properties has successfully priced its inaugural US dollar-dominated eurobond, the proceeds of which will be used to fund its expansion in Central and Eastern Europe(CEE).

“The eurobond proceeds will be used to refinance certain of Growthpoint’s existing CEE investments and to fund its investment into Warsaw-listed pure-play Polish property investor Griffin Premium, which is focused on office and mixed-use assets,” the company said on Wednesday.

The $425-million eurobond matures on May 2, 2023, and carries a fixed interest rate of 5.8% that is payable semi-yearly.

Growthpoint CEO Norbert Sasse said the company is pleased with the support for its eurobond debut.

Growthpoint group treasurer Dirkje Bouma added that, with its first ever eurobond, Growthpoint has taken advantage of a low interest rate environment in the Eurozone to raise long-term debt, which also diversifies the company’s sources of funding and extends its debt maturity profile.

Growthpoint’s strategy is to grow its international exposure to 30% of its earnings before interest and taxes, as well as 30% of the book value of its properties, over the next three years.

This will require about R10-billion of capital investment.

The eurobond issue gives the internationalisation strategy a considerable boost towards this three-year goal.

Meanwhile, the JSE on Wednesday also celebrated Growthpoint’s listing on the bourse’s Green Bond Segment (GBS).

Growthpoint is the first corporate in South Africa to issue a green bond on the JSE.

The JSE’s GBS was launched in October 2017 and it provides a platform for companies to raise funds that are ring-fenced for low-carbon initiatives and for investors to invest in securities that are truly green.

The R1.1-billion ($94-million) Green Bond will be used to refinance funding for the green office buildings in the new Growthpoint Thrive portfolio and specifically the Thrive platinum portfolio, which includes its top green-rated office properties.

Buildings in the Thrive portfolio have a South African Property Owners Association premium rating, as well as a Green Building Council of South Africa green star rating of four stars or higher.

Additionally, suitable industrial and retail properties with four-star green star ratings or higher will also be eligible. Environmental projects related to Growthpoint’s buildings that have positive environmental impacts, such as solar energy projects, will also qualify for green bond funds.